China Steel: Global Impact, Local Thinking

By

Andrew Peaple

Updated July 22, 2010 12:01 a.m. ET

The ups and downs of China's steel sector ripple globally these days. At the root of these gyrations, though, lay very local politics.

Facing slowing demand, Chinese steelmakers are lowering prices. Cuts at Baosteel, China's second largest steelmaker by output, mean its prices for August will be close to break-even levels of the past, says Citi Investment Research.